Snowflake (SNOW)

Investment Review After Q1 FY2027 Earnings (2026.05.27)

TL;DR

Snowflake is the leading cloud data platform — analytics + AI workloads on a consumption-based model — now layering AI agents (Snowflake Intelligence, Cortex Code) on top of the data plane. Just reported Q1 FY2027 product revenue $1.334B (+34% YoY), accelerating 400bps from Q4 with NRR 126%; non-GAAP OM 12% (+300bps YoY) — exceptional beat. Q2 FY2027 guided $1.415-1.42B (+30% YoY) and FY27 raised to $5.84B (+31%, from prior +27%) — strong acceleration. Stock $175 with N/M P/E(ttm) (GAAP loss; ~6.5x revenue), +16% post last quarter end and ripping +37% after-hours to $241 on the beat — pricing in AI-driven re-rate but still requires Coco monetization to compound.

Summary

Finding	Assessment
5-Year Stock Return	Stock currently $175, vs. $281 (5 years ago, pandemic peak). Revenue grew 5x ($592M→$5.0B TTM) but GAAP OP loss persists at -$1.3B. P/E not applicable. Stock whipsawed from $115 trough Oct 2024 to $226 Jul 2025 to $151 Apr 2026 to $175 today (with AH $241 on AI beat).
Business Model	STRONG. Cloud data platform with consumption-based pricing. $5.0B TTM revenue, 13,912 customers, RPO +38% YoY. Runs across AWS/Azure/GCP — new $6B 5-yr AWS deal. 75% non-GAAP product GM. Data gravity + marketplace ($7B AWS lifetime) create switching costs. Expanding into AI agents (Coco), transactional DB, observability.
Competitive Moat	NARROW Data platform stickiness real — intelligence layer moving into Snowflake via Coco + Snowflake Intelligence (the agentic control plane). Data sharing + marketplace create network effects AI reinforces. Q1 momentum suggests Snowflake is winning a piece of AI orchestration. Databricks remains the primary competitive threat.
Past 5-YR Drivers	Revenue 5x growth drove non-GAAP OM from negative to 12% (Q1 FY27). SBC declined from 60%+ to ~30% of revenue. Large customer base now 64 >$10M and 79 >$1M TTM. But GAAP OP flat at -$1.3B — SBC consumes most operating leverage.
Recent Stock Move	Stock at $175 today, +16% post last quarter end from $151 close. After-hours $241 (+37%) on Q1 beat + FY27 raise. Product revenue +34% (vs +30% Q4), NRR 126%, Coco at 7,100+ accounts. Selloff in early 2026 (-31% Q1 alone) on pre-print AI uncertainty; Q1 results re-rated the multiple.
Revenue Trend	DECELERATING Rev YoY: 33% (Q1 2027) → 31% (Q2 2027E). Product revenue specifically: +34% Q1 to +30% Q2 guide. FY27 raised to +31% (from +27% prior). Coco monetization is the new lift; comps get tougher in H2.
Margin Trend	EXPANDING OM%: -23% (Q1 2027) → -22% (Q2 2027E). Non-GAAP OM 12% in Q1 (+300bps YoY); FY27 non-GAAP OM raised to 13.5% from 12.5%. Path to GAAP breakeven requires SBC<20%.
TTM OP Trajectory	ACCELERATING TTM OP QoQ: -8% (Q1 2027) → -0% (Q2 2027E). TTM OP -$1,313M. Loss stabilizing as non-GAAP scaling; first sequential improvement in 5 quarters.
Key Opportunities	Cortex Code at 7,100+ accounts in 4 months (fastest product ever). Snowflake Intelligence accounts +2x QoQ. FY27 guide raised mid-year (+4pp). $6B AWS deal + $200M OpenAI + Natoma M&A extend moat. NRR back to 126% (+2pp QoQ). 46 new >$1M customers in Q1 (vs 26 yr-ago).
Key Risks	GAAP losses -$1.3B, $10B+ accumulated deficit. Databricks IPO could reframe multiple. AI products have lower GM than core. Coco monetization sustainability untested — Q1 may include one-time GA enthusiasm. Cost-governance becomes essential as Intelligence scales to thousands of users.
Catalysts	Q2 FY27 guided $1.415-1.42B (+30% YoY). Snowflake Summit + Investor Day (June 2026) — long-term targets, Coco/Intelligence demos, Natoma integration roadmap. Cloud runtime GA for autonomous agents. Continued Coco account growth from 7,100+ today.
P/E(ttm) Valuation	NOT APPLICABLE (GAAP loss). Price/Revenue ~6.5x at $175 (~8x at after-hours $241); Price/Non-GAAP FCF ~30x. On non-GAAP, SNOW trades at a reasonable multiple for a 34% grower with 75% gross margins. The stock is a bet on AI-driven consumption acceleration (Coco compounding) and SBC normalization. After-hours +37% suggests market is pricing in the Coco re-rate.

Q1 FY2027 Key Data (Feb-Apr 2026), reported 2026.05.27

Product revenue $1.334B (+34% YoY), accelerating 400bps from +30% in Q4. NRR 126% (up from 124%). Non-GAAP OM 12% (+300bps YoY). RPO +38% YoY.
13,912 customers (+616 net new, +38% YoY). 79 customers >$1M TTM (+46 in Q1 vs 26 a year ago). 64 customers >$10M TTM (+8 in Q1). 13 Global 2000 adds vs 4 prior year.
Q2 FY27 guide: $1.415-1.42B product revenue (+30% YoY), non-GAAP OM 12.5%. FY27 raised to $5.84B (+31% from prior +27%); FY27 non-GAAP OM raised to 13.5% from 12.5%. FCF margin 23%.

Key Takeaways from Earnings Call

AI-driven re-acceleration is the headline — product growth jumped 400bps to +34% with non-GAAP OM expanding 300bps YoY. Sridhar called Q1 "the strongest sequential dollar growth in company history." Coco (Cortex Code) drove the largest piece of the FY27 raise — went GA Feb 5 and already in 7,100+ accounts; Snowflake Intelligence accounts more than doubled QoQ. CFO Brian Robins: "Coco had the largest driver to the increase in our forecast."
FY27 product revenue guide raised from $5.6B (+27%) to $5.84B (+31%) — a 4pp acceleration mid-year. Driven by (a) Coco/AI monetization layered in for the first time (forecasts only count observed behavior); (b) core data platform reacceleration. AI is "a catalyst for core data platform" — Cortex Code itself drives more consumption as customers build pipelines/agents 10x faster.
Capital return + AWS megadeal + Natoma M&A signal confidence. $300M buyback in Q1 (1.7M shares); $800M remaining authorization. New $6B 5-year AWS agreement (more than 2x prior) — Snowflake commits to Graviton compute, AWS commits expanded go-to-market. Lifetime AWS Marketplace sales surpassed $7B. Natoma acquisition extends agentic control plane into SaaS apps (Slack, Gmail, Jira). $200M OpenAI partnership extended.
Margins held despite Coco's lower GM — 75% non-GAAP product GM maintained for FY27. AI products have lower GM than core, but Coco volume + AWS contract bandwidth savings offset. Hiring throttled to 17 organic adds in Q1 (vs ~400 yr ago); Observe added 173. Co-founder Benoit Dageville stepped back from day-to-day (board only); product still led by Christian Kleinerman. Investor Day at Snowflake Summit June 2026 — next major catalyst.

Key Segments and Revenue Mix (TTM Q1 FY2027)

Revenue Type	Revenue	% of Total	Key Details
Product Revenue	$5.0B (TTM)	~95%	Consumption-based compute, storage, AI inference. Q1 +34% YoY. Non-GAAP product GM 75%. NRR 126% (+2pp QoQ). 13,912 customers; 79 >$1M TTM.
Professional Services	$237M (TTM)	~5%	Implementation, training, consulting. Typically lower margin. AI rollouts driving services attach.

Business Model

SUPPLIERS

AWS (primary; new $6B 5-yr deal)
Microsoft Azure
Google Cloud Platform
AI model providers (Anthropic, OpenAI — $200M partnership)
Note: Cloud providers are also competitors

Compute / Storage →

SNOWFLAKE

Data Cloud platform
Cortex AI & Intelligence (agentic AI)
Snowpark (ML/development)
Marketplace ($7B AWS lifetime sales)
$5.0B TTM rev, 13,912 customers, RPO +38% YoY

Consumption / Subscriptions → $ Revenue

CUSTOMERS

13,912 total customers
+13 Global 2000 in Q1 (vs +4 yr ago)
79 customers >$1M TTM (+46 in Q1)
64 customers >$10M (+8 in Q1)
Financial services, tech, retail, healthcare

Moat Assessment: NARROW

Data platform stickiness real but moat narrowing as AI changes "where value lives." Snowflake as system-of-record for analytical data is genuine and embedded. Shift from "data = value" to "AI = value" risks pushing intelligence outside Snowflake.
Data sharing + marketplace create a network effect AI reinforces. Marketplace ($7B AWS lifetime sales) creates cross-company data network effects. AI amplifies it — more data centralized means better models. Offsets some commoditization risk.
Coco + Intelligence are the bets to own the AI layer, not just data. Q1 momentum (Coco 7,100+, Intelligence +2x QoQ, FY27 guide +4pp) suggests Snowflake is winning a piece of the agentic control plane. Natoma extends actions into SaaS apps.

Stock vs. Earnings — 5-Year Performance

Stock $175 today, vs. $242 (5 years ago) despite revenue 5x from $592M to $5.0B TTM. Whipsawed: $281 peak (2021), $115 trough (Oct 2024), $226 (Jul 2025), $151 Q1 FY27 close, $175 today plus $241 after-hours.
GAAP operating losses persist at -$1.3B annually for 5+ years with $10B+ accumulated deficit. SBC (~32% of rev) is the primary cause. Non-GAAP OM expanded to 12% in Q1 FY27 (+300bps YoY); FY27 OM guide raised to 13.5% — still no GAAP profit.
AI pivot is now monetizing — Coco at 7,100+; Intelligence +2x QoQ. Coco went GA Feb 5; drove the largest piece of the FY27 raise. CFO: AI is "a catalyst for core data." Re-rate or fade hinges on Coco compounding.

Past 5-Year Key Drivers

Revenue 5x ($592M→$5.0B TTM) but GAAP OP loss flat at ~-$1.3B — leverage consumed by SBC. Non-GAAP OM expanded to 12% (+300bps YoY); SBC fell from 60%+ to ~32% of rev. GAAP profit needs SBC<20%.
Consumption model drives NRR 126% but adds forecasting uncertainty. Snowflake only forecasts observed behavior — Coco was layered into guidance only after Q1 GA. CFO: "Unique opportunity to layer Coco in." Efficiency can cut per-workload rev.
Large customer growth is the key revenue driver. 79 customers >$1M TTM (46 crossed in Q1 vs 26 yr-ago); 64 >$10M (+8 in Q1). One big bank finished a 2-yr Teradata migration. RPO +38% YoY; Coco-driven migrations now 1-2 quarters vs 2 yrs prior.

Quarterly Key Metrics

USD	Q1'25	Q2'25	Q3'25	Q4'25	Q1'26	Q2'26	Q3'26	Q4'26	Q1'27	Q2'27E
Quarter End	Apr 24	Jul 24	Oct 24	Jan 25	Apr 25	Jul 25	Oct 25	Jan 26	Apr 26	Jul 26
Stock Price	$161	$143	$115	$154	$146	$224	$226	$219	$151	$175
Stock QoQ	-15%	-11%	-20%	+34%	-5%	+53%	+1%	-3%	-31%	+16%
Rev YoY	+33%	+29%	+28%	+27%	+26%	+32%	+29%	+30%	+33%	+31%
OM%	-42%	-41%	-37%	-39%	-43%	-30%	-27%	-25%	-23%	-22%
R40 (Rev YoY + OM%)	-9%	-12%	-9%	-12%	-17%	+2%	+2%	+5%	+10%	+9%
TTM OP ($M)	-1,171	-1,241	-1,328	-1,438	-1,536	-1,521	-1,502	-1,434	-1,313	-1,311
TTM OP QoQ	+8%	+6%	+7%	+8%	+7%	-1%	-1%	-5%	-8%	+0%
FCF/OP ttm	-73%	-68%	-62%	-64%	-49%	-49%	-52%	-78%	-89%	-112%
Debt/EBITDA	1.6x	1.9x	17.3x	16.1x	19.5x	13.1x	9.6x	7.8x	4.9x	4.9x
P/E(ttm)	—	—	—	—	—	—	—	—	—	—

Recent Stock Performance & Drivers

Stock $175 today, vs. $151 Q1 FY27 close (Apr 30) — ripping +37% after-hours to $241 on the print. Regular session muted (-1.3%) pre-beat; AH driven by FY27 guide raise +27%→+31%, NRR 126%, and Coco first layered into model.
TTM OP improved sequentially for the first time in 5 quarters — from -$1.43B to -$1.31B. Q1 GAAP OP -$326M vs -$365M yr-ago. Non-GAAP OM +300bps to 12%. R40 climbed to 10% from 5%. SBC ~$402M (~30% rev) still overhang, trend improving.
P/E(ttm) remains N/M — Snowflake has never generated a GAAP profit. Price/revenue ~6.5x at $175 ($5.0B TTM); ~8x at AH $241. On 75% non-GAAP GM + 34% growth, multiple is reasonable — only if Coco monetization compounds.

Opportunities

Coco is the fastest-adopted product ever — 7,100+ accounts after GA Feb 5. CFO: Coco was "the largest driver to the increase in our forecast." Drives more core-platform consumption by building agents/pipelines/migrations 10x faster.
FY27 guide raised 4pp mid-year — from +27% to +31% product growth. Mid-year raises rare for consumption SaaS. Driven by Coco monetization + core reacceleration. Q1 added 13 Global 2000 (vs 4 yr-ago) and 46 new >$1M customers.
AWS $6B 5-yr deal + $200M OpenAI + Natoma M&A extend the moat. AWS deal >2x prior with expanded go-to-market. AWS Marketplace lifetime sales now $7B. Natoma extends agentic control plane into Slack/Gmail/Jira. SAP partnership now GA.

Challenges

GAAP losses persist at -$1.3B TTM with $10B+ accumulated deficit. SBC ~$402M in Q1 (~30% of rev). Even at FY27 non-GAAP OM 13.5%, GAAP OM is ~-23%. GAAP profit needs SBC<20% — 2-3 yrs away. Limits institutional base.
Databricks IPO (filed) is the most direct competitive threat. Databricks (~$3B+ ARR, growing 50%+) has more AI-native architecture (MLflow, Unity Catalog, lakehouse). A premium IPO multiple could pressure Snowflake's multiple as the public reference.
Coco / Cortex carry lower gross margins than core. CFO: AI products lower GM — offset via AWS bandwidth savings + Coco volume to hold 75% non-GAAP GM for FY27. Cost-governance (token limits, account caps) essential as Intelligence scales.

Next 12 Months

Q2 FY27 guided at $1.415-1.42B product revenue (+30% YoY); non-GAAP OM 12.5%. A beat >$1.46B (3%+) with NRR 126%+ would confirm Coco compounding. Deceleration <28% would raise concerns Q1 was a one-time Coco GA effect.
Snowflake Summit + Investor Day (June 2026) is the next major catalyst. Management will showcase Coco / Intelligence at scale, demonstrate Natoma integration, refresh long-term targets, and update the agentic control plane roadmap.
Natoma close + Observe ramp + cloud runtime GA. Natoma extends Coco actions into SaaS apps. Observe contributing <1pp in Q1, ramping to ~1pp full year. Cloud runtime (public preview) lets Coco agents run autonomously — meaningful unlock.

Next 12-24 Months

SBC trajectory is the key to GAAP-profit narrative. SBC at ~30% of rev today; sustained leverage needs it <20%. Q1 hiring throttled to 17 organic adds (vs ~400 yr-ago). If SBC declines 4-5pp/yr, Snowflake approaches GAAP breakeven by FY29-30.
Coco monetization must prove incremental, not substitutive. $100M+ AI run rate today on $5B base (~2%) needs to scale. Bull: Coco drives net-new consumption (agents, pipelines). Bear: Coco efficiency lets customers do same work with less compute.
Databricks IPO + hyperscaler AI dynamics will frame the next 12-18 months. A Databricks IPO at premium multiple lifts both. Hyperscalers bundling AI+data aggressively pressure Snowflake. AWS $6B deal signals AWS sees Snowflake as partner.

Core Metrics Scorecard

	Q3'22	Q4'22	Q1'23	Q2'23	Q3'23	Q4'23	Q1'24	Q2'24	Q3'24	Q4'24	Q1'25	Q2'25	Q3'25	Q4'25	Q1'26	Q2'26	Q3'26	Q4'26	Q1'27	Q2'27E
Quarter End	Oct 21	Jan 22	Apr 22	Jul 22	Oct 22	Jan 23	Apr 23	Jul 23	Oct 23	Jan 24	Apr 24	Jul 24	Oct 24	Jan 25	Apr 25	Jul 25	Oct 25	Jan 26	Apr 26	Jul 26
R40 > 40%	✅	✅		✅
R40 accelerate	✅	✅		✅					✅				✅			✅		✅	✅
TTM OP QoQ > 10%						✅
TTM OP QoQ accelerate			✅	✅	✅	✅					✅		✅	✅						✅
TTM FCF/OP > 60%
Debt/EBITDA < 3.5						✅	✅	✅	✅	✅	✅	✅
Total Passes	2	2	1	3	1	3	1	1	2	1	2	1	2	1	0	1	0	1	1	1
Stock QoQ	+25%	+12%	-32%	-39%	+22%	-20%	+14%	+14%	-14%	+25%	-15%	-11%	-20%	+34%	-5%	+53%	+1%	-3%	-31%	+16%
P/E(ttm)	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—

SNOW’s scorecard is structurally capped at 1-3 passes because GAAP losses make most criteria unachievable. R40 is sub-40% (growth offset by deep negative OM); R40>40% has failed every quarter for 4+ yrs. TTM OP QoQ>10% rarely passes. Debt/EBITDA fails when EBITDA is negative.
The scorecard is poorly suited for pre-profit growth companies like SNOW. With GAAP OP at -$1.3B, scorecard gives no credit for 34% growth, 75% non-GAAP GM, 126% NRR, or strong RPO. SNOW trades on non-GAAP metrics, not R40 or GAAP OP QoQ. Use as context, not conviction.
Best reading was 4 passes (Q2'23, Q4'23); current Q1 FY27 sits at 1 pass. The 4-pass quarters saw stock recover only after -32%/-39% drawdown — scorecard lagged the move. For SNOW, passes are descriptive. Stock is driven by revenue acceleration + NRR + AI adoption.

Chart: R40 vs Stock Price (Since 2020)

Chart: Scorecard Total Passes vs Stock Price (Since 2020)

Q4 FY2026 Key Data, reported 2026.02.25

Revenue +30% YoY; non-GAAP product GM 76%; non-GAAP OM 10.5% (up from 6%). TTM OP -$1.43B (GAAP loss not improving in absolute terms). SBC at 34% of revenue ($1.6B) is the dominant cost.
RPO +42% YoY ($9.8B); 7 nine-figure deals in Q4. Largest deal ever >$400M TCV. 46% of RPO expected within 12 months — $4.5B of near-term revenue visibility.
AI accelerators: Snowflake Intelligence at 2,500 accounts; Cortex Code at 4,400+ customers. AI revenue run rate crossed $100M. AI influenced 50% of bookings in Q3 FY2026. TAM expanding toward $355B by CY2029.

Key Takeaways from Earnings Call

AI is the most promising growth catalyst. Snowflake Intelligence (agentic AI on enterprise data) reached 2,500 accounts in just 2 quarters — the fastest adoption ever; Cortex Code (AI coding agent) has 4,400+ customers and accelerates data engineering 10x. AI revenue run rate crossed $100M; AI influenced 50% of bookings in Q3 FY2026.
RPO acceleration + Observe + Postgres expand the platform. RPO +42% YoY with 7 nine-figure deals (vs 2 a year ago) and the largest deal ever (>$400M TCV) signal lengthening enterprise commitments. Observe acquisition ($600M) adds AI-powered observability ($50B TAM); Snowflake Postgres + Openflow expand from analytics-only to operational/real-time.
GAAP losses + Databricks + data-layer-vs-AI-layer battle are the bear case. GAAP losses of -$1.4B with $9.5B accumulated deficit; SBC at 34% of revenue would still produce GAAP losses at the guided 27% level. Databricks (private, ~$10B+ ARR, growing 50%+) has more AI-native architecture and is the default for many ML/AI teams.

Source: SEC EDGAR annual and quarterly filings, company earnings conference calls and presentations.

Disclaimer: This report is for educational purposes only. NO investment advice.